Irene’s eatery – focusing on the needs and not on the wants

By Zoya Zaheer

After 2 long flights and a 2 hour jeep ride, we finally arrived at a tiny town in Bohol called Jagna. I have always been much pampered and initially when I arrived in Tubud Mar, I thought I would not be able to survive here. Luxuries like air conditioning and washing machines were unknown to them and the people here believed in leading very simple lives. My host mother Neneng told me that they just had enough money for their needs such as food and education. They didn’t have any money to afford things like ice creams and pizzas. This was just not limited to the home stay but also our business.

My business partner Si Eun and I went to visit our business for the first time on Wednesday. It was a small eatery in the back of the market run by woman called Irene and her husband. Our journey since then has been a roller coaster ride. My first impression of the place was that it’s a small, dark and a very simple place. The food at this eatery is very cheap and an average meal costs around 30 pesos. After talking to the owner and tasting the food my impression of the place completely changed.

At first I thought that these businessmen are naive and we can help them use various marketing strategies and economic tools to improve their business. The first thing I noticed while walking to the eatery were similar eateries selling the exact same food at the exact same prices. There was nothing that gave this eatery a competitive advantage over its competitors. Then I was very surprised to find out that the woman did not maintain any records and relied on her memory to know how much her business was making. She had no records of how much her grocery and other supplies cost or which dish was making the most amount of money. Irene told us that they worked at the eater from 4 am to 6pm and she had no time to maintain the records. ‘We make enough money to pay our workers and our bills. We are happy as long as we have enough money to feed ourselves and end our kids to school’, said Irene with a lot of satisfaction and showed little interest in maintaining any records. The working conditions were also very harsh and they had to spend long hours in a small kitchen without any ventilation. Irene felt that they had enough work already and didn’t want to add on to work which according to her had no benefits. However, it is obvious that the right business decision and suggestions are hard to make based on instinct, therefore, it is clear that measuring their business and building an easy but effective recording system should be our first step.

Coming up with an easy accounting system was not that difficult but convincing Irene to write the records everyday was a difficult task. At first she was very reluctant to do it but after we told her the benefits of it and showed her how easy it could be she promised to write her costs and sales every day. We also convinced her to get receipts for her every purchase and maintain a small box of money so that she doesn’t has to rely on her memory to remember what she bought and what she sold.

The next thing we had to work on was making her business standout without significantly adding to the cost. We spoke to a few customers who regularly visit this eatery and eateries around for food. We tried finding the criterion based on which they chose which place to visit and realized that there was no specific criterion and went to the place which wasn’t too crowded or which was the closest to their work place. After hearing them we knew that we had to come up with ideas to give Irene’s a competitive advantage and increase customer loyalty. The first thing we thought of was introducing a loyalty reward program where every customer can earn points on every visit and redeem it for free food later. We also created a Facebook page to be able to advertise it more. Our professor, Beau also suggested us to work on installing WiFi in the restaurant. Our next step would be to find out the cost of getting WiFi and if Irene can afford it.

After working in the business for only 2 days I realized that it is very easy studying about various market strategies and tools in theory but it is actually very difficult to implement them. This was not just another case study we were supposed to work on. They were real businesses with lives of real people associated to it. I believe that there is a lot of scope for improvement for this business and it has some real potential. We would further help her bring small changes to her everyday menu by seeing what she sells the most. This would hopefully help her realize the importance of accounting and how simple record keeping can increase profits even in the short run. We are also going to go to schools and colleges to promote Irene’s eatery and introducing a special student meal with a snack, a main course and a drink. We would then see the effects of these strategies and then decide which ones to introduce in the long run.

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